FERC chairman signals push for grid-enhancing technology incentives
Chairman Swett's move comes as the regulator faces pressure to expand transmission capacity without the decade-long timelines of new construction.
FERC Chairman Swett told a Senate committee on Thursday (2026-07-24) that the agency is examining financial incentives for grid-enhancing technologies, the software and hardware tools that extract more capacity from existing transmission lines. The statement came under questioning from Committee Chair Mike Lee, R-Utah, who noted that FERC's Order 1000 — designed to inject competition into the transmission planning process — "has not yet fully materialized." Lee pressed Swett on what else the commission could do to bring more competitive pressure to the electricity sector.8
The timing reflects the bind FERC is in. Building new high-voltage transmission typically takes a decade or more; the power demand from data centers is arriving now. The agency has spent the past year trying to accelerate the entire interconnection process while holding the grid together, and grid-enhancing technologies represent one of the few routes that could add capacity on a shorter timescale. OATI, a software firm working on a nationwide GET deployment initiative, said in June 2026 that it expected real-world capacity improvements to emerge "by the third and fourth years of their joint project" — a timeline it described to Canary Media as "practically light speed in the world of transmission."3,5
FERC already offers transmission owners financial incentives in some areas. Commissioner David LaCerte, speaking at a WIRES event in Philadelphia on Thursday (2026-07-09), referenced two existing provisions: an extra 0.5 percentage point return on equity for utilities that belong to a regional transmission organization, and a "construction work in progress" allowance that lets utilities recover costs during a project rather than after completion. What Swett has in mind for grid-enhancing technology, and whether it fits within or extends those existing structures, was not detailed at the hearing.6
LaCerte's Philadelphia remarks carried their own urgency. PJM Interconnection's status quo was "really untenable," he said, with the grid operator's stakeholder process having "continued to just grind into gridlock." PJM serves a large share of the eastern US grid; any commission effort to accelerate technology adoption there would carry outsized consequences for the nation's largest wholesale power market.6
The commissioners are not working in isolation. In June 2026, FERC voted unanimously to issue show-cause orders to all six regional transmission organizations and independent system operators under its jurisdiction, directing each to either justify or rewrite its large-load interconnection tariffs. FERC staff said the orders addressed "the pressing need in the RTO/ISO regions" and would affect 200 million Americans in more than 30 states, covering nearly two-thirds of US electricity load under commission jurisdiction.4
The data center build-out is driving much of the pressure. As of late June 2026, the commission characterized itself as facing "historic challenges" as it raced to secure power for the nationwide expansion. Industry observers noted FERC had become "not the old sleepy agency," and large technology companies have responded in kind, hiring energy and regulatory specialists to navigate commission proceedings directly. Brad Simmons, cited in May 2026 congressional coverage, noted that FERC's approach to the administration's push for faster power connections had "a direct impact on our infrastructure build-out."5,2
FERC widened its scope further on Wednesday (2026-07-16), ordering NERC to develop mandatory reliability standards specifically for data centers and other large computational loads. NERC posted an initial draft for comment on April 1 (2026-04-01) and expects to issue revised criteria for a second stakeholder round in August 2026.7
States are not waiting. Two California bills under consideration in 2026 would require utilities to maximize output from existing grid assets, reflecting the same calculation behind any GET incentive push — that untapped capacity already sits inside the transmission system if the right tools and rules are deployed.1
The design of any GET incentive will ultimately determine whether it changes deployment patterns on the ground. The existing return-on-equity adder and CWIP allowance both reward capital investment, which suits large construction projects. Software-based grid tools work precisely because they avoid major capital spending; an incentive calibrated to construction may do little for them. Whether FERC structures a performance-based or deployment-linked mechanism instead, and whether it holds clear statutory authority to do so, remains unanswered after Swett's signal at Thursday's (2026-07-24) hearing. NERC's August 2026 criteria round is now the nearest fixed point on that timeline.6,7